June 26, 2012

In Dispute Over Blocked Payment, Judge Orders More Info From Treasury

A federal judge in Washington today ordered the U.S. Treasury Department to provide additional information concerning the agency's block on a $30,000 payment that was en route to Cuba.

The judge, Richard Roberts of U.S. District Court for the District of Columbia, said the Office of Foreign Assets Control, a Treasury division, has not provided sufficient information to justify withholding certain correspondence from Island Film, S.A. For other requested records, however, the judge approved continued secrecy.

Island Film, based in Cuba, sued the assets control office in Washington in February 2008 to get documents about the blocked payment. The government stopped movement of the payment from Australia to Island Film while the wire transfer was being processed at a New York bank.

That payment still remains blocked, a lawyer for Island Film, Peter Herrick of Miami, said today. Herrick, however, did not immediately comment on the court's ruling in the company's Freedom of Information Act suit.

The Treasury Department, represented by the U.S. Attorney's Office for the District of Columbia, wants to withhold documents that include, among other things, financial transaction details that were submitted to the agency under a grant of confidentiality.

OFAC is the Treasury division that enforces economic and trade sanctions against foreign countries, individuals and groups, including designated terrorists and drug traffickers.

Roberts, the judge, said Treasury "has not provided express evidence that its sources drafted the correspondence under a promise of confidentiality."

Providing information about sanctions, Roberts said in the ruling, "is more closely analogous to providing information on computer crimes than to providing information about rebellion or insurrection, drug trafficking or terrorism."

Treasury also wants to keep from the public screen printouts from databases used in the investigation of Island Film. A team of prosecutors said the public does not know which databases the foreign assets control office uses.

If a person or company under investigation knew "when, how, and to what extent Treasury relies on certain databases as part of its investigations, they could find this information valuable in indirectly tracking, or even obstructing, an investigation," the government said.

Roberts said in his decision that the agency hasn’t provided sufficient information to show a link between the disclosure of printouts and "revealing when, how and to what extent OFAC relies on these databases in its investigations."

The judge did not force Treasury to produce other records, including several bank applications to release blocked funds.

The disclosure of contractual terms and banking information, Roberts said, "could cause the applicants competitive harm by revealing customer identities and transaction details, and cause the customers to seek the services of competitors who may seem better able to protect their financial privacy."